The Profitability - Risk Relationship And Financing Decision
The enterprise financial decision is a rational process for option to the optimal variant related to financing and investments. For the capital investment to be justified, the profitability of the invested money must be at least equal with the profitability of the alternative investment opportunities with the same risk on market. The choosing of a way for financing is determined on the one side by their cost and on the other side by the existent capital structure. In this paper, the author tried to analyze the profitability - risk relationship in the financing decision for the "NIKOS" Ltd.